MERSCORP Holdings announced Monday that a Federal court again ruled in MERS’ favor in a lawsuit brought by a homeowner who challenged MERS’ authority to assign a mortgage.
According to MERS, parent of the electronic mortgage registry with the same name, theU.S. District Court for the District of Wyoming granted a motion to dismiss a wrongful foreclosure suit, ruling that use of MERS as mortgagee of record does not split the mortgage from the promissory note or render the mortgage invalid and the note unsecured.
In the lawsuit, Wieloh vs. Bank of America (BAC), the borrower alleged that Bank of America’s predecessor, BAC Home Loans, lacked authority to foreclose because the assignment of the mortgage by MERS to BAC Home Loans did not transfer an interest in the note and therefore rendered the mortgage null and void.
The District Court granted Bank of America’s motion to dismiss, citing other Federal court’s decisions in similar cases.
According to MERS, the District Court relied upon the Tenth Circuit Court of Appeals Bankruptcy Appellate Panel’s conclusion a similar case that “under Wyoming law, a note holder’s use of MERS as the mortgagee on a mortgage does not render the mortgage ineffective or the note unsecured . . . . [And] the mortgage may be freely transferred without becoming [unenforceable].”
Due to there being no Wyoming law that would contradict the Tenth Circuit Court of Appeals’ decision, the District Court held that an allegation that MERS splits the mortgage from the note does not present a valid claim for wrongful foreclosure in the state of Wyoming.
“The decision from the U.S. District Court for the District of Wyoming supports, without question, the conclusion that MERS’ involvement in a mortgage does not split the security instrument from the note,” said MERSCORP Holdings vice president for corporate communications, Janis Smith. “This court’s decision joins other similar decisions across the country.”
